MAX FINANCIAL SERVICES 2021-22 Annual Report Analysis

Thu, 31 Mar

MAX FINANCIAL SERVICES has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during FY21-22.

MAX FINANCIAL SERVICES Income Statement Analysis

• Operating income during the year fell 0.2% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 7.9% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 1.9% in FY22 as against 2.1% in FY21.
• Depreciation charges increased by 11.5% and finance costs increased by 63.5% YoY, respectively.
• Other income declined by 77.3% YoY.
• Net profit for the year declined by 43.1% YoY.
• Net profit margins during the year declined from 1.8% in FY21 to 1.0% in FY22.

MAX FINANCIAL SERVICES Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	312,865	312,292	-0.2%
Other income	Rs m	1,393	317	-77.3%
Total Revenues	Rs m	314,258	312,609	-0.5%
Gross profit	Rs m	6,563	6,042	-7.9%
Depreciation	Rs m	1,617	1,802	11.5%
Interest	Rs m	410	670	63.5%
Profit before tax	Rs m	5,929	3,887	-34.4%
Tax	Rs m	331	703	112.0%
Profit after tax	Rs m	5,598	3,184	-43.1%
Gross profit margin	%	2.1	1.9
Effective tax rate	%	5.6	18.1
Net profit margin	%	1.8	1.0

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MAX FINANCIAL SERVICES Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 1,121 billion as compared to Rs 937 billion in FY21, thereby witnessing an increase of 19.6%.
• Long-term debt stood at Rs 5 billion as compared to Rs 0 million during FY21, a fall of 0.0%.
• Current assets rose 20% and stood at Rs 1,151 billion, while fixed assets rose 5% and stood at Rs 27 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 1,177 billion as against Rs 981 billion during FY21, thereby witnessing a growth of 20%.

MAX FINANCIAL SERVICES Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	33,422	39,346	17.7
Current Liabilities	Rs m	936,931	1,120,723	19.6
Long-term Debt	Rs m	0	5,206	0.0
Total Liabilities	Rs m	980,568	1,177,473	20.1
Current assets	Rs m	955,224	1,150,941	20.5
Fixed Assets	Rs m	25,343	26,531	4.7
Total Assets	Rs m	980,568	1,177,473	20.1

MAX FINANCIAL SERVICES Cash Flow Statement Analysis

• MAX FINANCIAL SERVICES's cash flow from operating activities (CFO) during FY22 stood at Rs 85 billion, an improvement of 23.3% on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -88 billion, an improvement of 29.0% on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs 4 billion, an improvement of 521% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 485 million from the Rs -514 million net cash flows seen during FY21.

MAX FINANCIAL SERVICES Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-21	Mar-22
Cash Flow from Operating Activities	Rs m	68,922	84,959	23.3%
Cash Flow from Investing Activities	Rs m	-68,515	-88,354	-
Cash Flow from Financing Activities	Rs m	-921	3,880	-
Net Cash Flow	Rs m	-514	485	-

Current Valuations for MAX FINANCIAL SERVICES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 9.2, an decline from the EPS of Rs 16.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 753.9, stands at 81.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 6.6 times, while the price to sales ratio stands at 0.8 times.
• The company's price to cash flow (P/CF) ratio stood at 64.0 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	906.6	904.9
TTM Earnings per share	Rs	16.2	9.2
Diluted earnings per share	Rs	16.2	9.2
Price to Cash Flow	x	41.1	64.0
TTM P/E ratio	x	53.0	81.7
Price / Book Value ratio	x	6.7	8.1
Market Cap	Rs m	225,430	318,886
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for MAX FINANCIAL SERVICES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.0x during FY22, from 1.0x during FY21. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio deteriorated and stood at 6.8x during FY22, from 15.5x during FY21. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company declined and down at 8.1% during FY22, from 16.7% during FY22. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company declined and down at 10.2% during FY22, from 19.0% during FY21. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company declined and down at 0.3% during FY22, from 0.6% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Current ratio	x	1.0	1.0
Debtors’ Days	Days	71	79
Interest coverage	x	15.5	6.8
Debt to equity ratio	x	0.0	0.1
Return on assets	%	0.6	0.3
Return on equity	%	16.7	8.1
Return on capital employed	%	19.0	10.2

To see how MAX FINANCIAL SERVICES has performed over the last 5 years, please visit here.

MAX FINANCIAL SERVICES Share Price Performance

Over the last one year, MAX FINANCIAL SERVICES share price has moved down from Rs 859.4 to Rs 753.9, registering a loss of Rs 105.4 or around 12.3%.

Overall, the S&P BSE SENSEX is up 16.8% over the year.

(To know more, check out historical annual results for MAX FINANCIAL SERVICES and quarterly results for MAX FINANCIAL SERVICES)

Read: Latest Annual Report Analysis of MAX FINANCIAL SERVICES